Existing Industries. Problems and Prospects

Scientific Essay, 2008

10 Pages



Mrs. Jyotirmayee Devi, M.A., M.Ed., M.Phil.

Asst. Professor, Dept. of Geography

Saraighat College, Changsari


The term industry is confined to the production of goods i.e. manufacturing industry. In a wider sense the same term is used to describe the service industries, banking, transport as well as mining activities. Similarly the term industrialization is used to designate the growth of manufacturing industry.1 Generally agriculture, mining and services are excluded from it. Industrialization has always been recognized as a major tool for economic development of a region. It is the principal component of the secondary sector and its main function is to provide work for the growing population to satisfy the demand for manufactured goods and to raise the standard of living by the per capita income of the region. Industry id responsible for converting raw materials in to finished goods, which in turn encourage the development of tertiary sector, like marketing, transport and servicing etc. The transfer of persons engaged in the primary sector to secondary and tertiary sectors are generally visualized as social changes brought about by industrialization 2.


The state of economy of Assam during the pre-colonial period was as a whole prosperous. Tavernier 3 stated, “The kingdom of Assam is one of the best countries in all Asia, for it produces all things necessary for human subsistence, without any need of foreign supply. There are in it mines of gold, silver, steel, iron, and a great store of silk”. During this period agricultural products were sufficient to meet the requirements of the people; industry and crafts were developed, and a considerable volume of trade and commerce existed with neighbouring provinces 4. Basically an agricultural society, the Assamese combined agriculture with other trades. There are references to weavers, spinners, goldsmiths, potters, and workers in ivory, bamboo, wood, hide and cane, 5 The trade was to mutual advantage, the predatory character of some of the was extremely disadvantageous to the people of the plain. The ‘ Duars ’ served as important commercial centers not only with regard to trade with the frontier tribes but also with the kingdom beyond.

The British colonial rule inaugurated a process of de-industrialization in India, a process in which, the traditional Indian industries suffered so badly that most of these either decayed beyond recovery or were on the road to ultimate ruin. This de-industrialization was the result of a conscious policy of the British to extract the raw materials from India in order to feed the growing industries in England and to promote the market for English goods in India. The role of the East India Company was merely that of an agent for the implementation of an economic policy formulated in England. Assam was no exception to this general process6.

The most important colonial innovation in Assam was the introduction of the tea industry, which gave Assam a place of pride in the commercial map of the world. The discovery of the indigenous tea plant in Assam was of profound political and commercial significance to Britain. In fact it has been regarded as the single most important factor, which had influenced the company in its decision to annex the province 7. In 1834, the report of specimens of tea convinced the Botanists and the government that the Assam tea plant was identical with that of China 8. The regeneration of native industries formed part of the resource mobilization programme of the colonial regime. The govt. therefore, set forth to arrest the further decline of indigenous crafts, to regenerate them if possible and to lead local enterprises in to these small-scale industries. It was, therefore, necessary to ensure that only those industries were encouraged whose products had an adequate local demand and for which raw materials and labour were available locally. Another important factor was the question of local capital investment. The industrial development of the province had so far revealed an absence of Assamese industrial enterprise.

The pattern of industrial growth in Assam in the nineteenth century reflected the general phenomenon prevailing throughout the country during that period. The development occurred only in pockets, groomed to satisfy the requirements of British economy. With the exception of the factories for the manufacture of tea and the oil and coalmine in and around Digboi, there were no industries worth mentioning in the province. Even in 1899 there were only 11 factories in the entire Brahmaputra valley, most of which were saw mills.9 The majority of people lived in rural areas and even the census of 1901 recorded only 2% of the population as dwelling in urban areas 10. The little industrial growth that took place in Assam, indigenous enterprise and capital were conspicuous by their absence. Several factors contributed to the emergence of this situation one of the primary census was the drain of wealth from the province.11 In fact, the British policy of de-industrialization had itself aggravated the process of drain by depriving the local craftsman and artisans of their livelihood. In the absence of indigenous competition, foreign capitalists monopolized and reaped all the advantages of Assam’s material resources. The transfer of money from Assam was only one aspect of the drain. Equally big loss had resulted from the large export of raw materials from the province. By the official circle in India was never destined to be a great industrial country. Her role as a tropical colony lay in producing raw materials only in order to be utilized by the western countries possessing superior technical and scientific skill 12.

The development of the new industries in a purely subsistence economy of the Brahmaputra valley left imprint on the agrarian structure of the region. The tea plantations, coalmines, oil refineries and railways all undoubtedly imply significant innovations. However it must be remembered that the industrial growth of Assam, like the rest of India, spurred the industrialization of Britain and had very marginal positive impact on the local economy.


It is known to all that North Eastern region of India is industrially backward. It spread over an extensive area of 2,55,089 Sq Kms constituting 7.8% of the total geographical area inhabited by a population of 3,65,00108 persons contributing 3.5% of India’s total population 13. Its border is bounded by 5000K.M international boundary, the only link with the mainland is the Siliguri Corridor measuring 33K.M. wide 14. The vital road and railway routes linking the North Eastern region runs parallel and very close to each other through this narrow corridor in the western part of Assam. Many of the tributaries of Brahmaputra cross the routes at different places 15. Thus the narrow corridor is bound to be overburdened and constricted; more particularly during the rainy season when increased floods disrupt the entire region from rest of the country. Such a strategic geo-political situation of the region, in fact is the root cause of its backwardness in many counts prompting a feeling of alienation. 16.

During the British period the indigenous industries faced stiff competition from the mill made cheap products imported from outside and quickened. Weaving still continues to be an important occupation, especially of the women of the region. Handloom and weaving is still very important in this region and there are about 1.3 million handlooms and about1.5 millions weavers in northeastern region. The total production of these looms is about Rs. 1060 million, which accounts for 6% of the national output.17 There are about 5000 handicraft units engaging about 40,000 craftsmen. There are 22 industrial estates in N E India and they are distributed 12 in Assam, 5 in Tripura, 2 in Meghalaya and 1 each in Arunachal and Manipur. Most of the large and medium industries belong to agro-based, mineral based, chemical and engineering industry. The following table may form an idea of the fact.

Table- 1.

Number of New units established by the type of Industries.

illustration not visible in this excerpt

Source: Directorate of Industries & Commerce, Assam

Economic Survey of Assam 2009-2010

The major agro-based industries are tea manufacturing, rice and flourmills, cotton ginning and hosiery mills, spun-silk mills, jute mills and few khandsari and sugar mills, vegetable and oil pressing mills, a few food processing and Citronala oil distillation mills etc. The forest-based industries include plywood industry; few match factories, medium paper mills, and extraction of Agar essence etc. Petroleum and natural gas, coal, limestone, and Silliminite are important minerals in the region. Oil refineries, Petrochemicals, cement factories and a few fertilizer plants have been set up in the region. The chemical industries include plastic industry, a few drug manufacturing units, carbon blocks and carbon powder manufacturing units. Engineering Industry includes a few workshops to repair machines of tea factories and train engines, a few iron rerolling mills and a few factories for production of Hume pipes etc. There are 166 large and medium scale industrial units in the region of which 118 are located in Assam, 18 in Arunachal, 16 in Nagaland, 7 in Meghalaya, 6 in Manipur and one each in Mizoram and Tripura. The condition of Mizoram and Tripura is below level. In fact the growth of industries in the entire region is very discouraging.


North East India is industrially backward even by Indian standard. Apart from a few agro based and mineral based industries, it has practically no manufacturing industry worth the name. The main problems of uneven industrial and economic development of this region are that the North East India is located at the North easternmost corner of India, surrounded almost on all sides by foreign countries, except a narrow passage which links it with the rest of the country. In spite of having huge development potential, the economy of Assam remained underdeveloped as it is characterized by poverty, underutilized man power and untapped natural resources. In spite of being blessed with a high potential for development of resource based and demand based industries in the state the pace of industrialization in Assam had not been satisfactory. The industrial sector with the state had been centralized around some particular sectors only.

The volume of private investment in Assam is very low due to heavy risk involved in the investment. These risks are both natural risks arise through natural calamities and political risks, as the state itself is a border state. Thus the factory industries in the state are growing at a very slow rate. The state is experiencing a very poor rate of capital formation. The volume and rate of savings in Assam are very poor. As the level of per capita income in Assam is very poor, the savings potential is low. Lack of capital formation is a very important hurdle on the pace of industrialization of the state.19 The investors from within as well as outside are not willing to invest their capital in Assam. Geographical isolation and high cost of production of the state inhibit private investment from other region. The economic and basic infrastructural facilities, which includes power, transport and communication facilities etc. are not yet satisfactorily developed in the state. Without a sound infrastructural base, the state cannot develop various industries on the basis of its natural endowments.

Power, one of the most important infrastructural needs for industrial development has not been adequately tapped. Although the region has enormous quantities of natural gas, coal, petroleum and running water none of these has been adequately used to develop electricity. This is clear from the fact that per capita production of electricity in the region is only 33 KW as against 155 K W of the country as a whole 20 The energy requirements in the state has been worked out at 6433.000 million units during the year 2008-09 to meet the demand of 15553 Lac consumers as against 5280.000 million units in the previous year. But the availability of energy during the aforesaid periods was 4270.764 million units and 4015.000 million units respectively. To meet the demand of the requirement of power the ASEB has been purchasing power from other public and private sources resulting high-energy tariff to the consumers. The requirements and shortage of electricity in Assam has been appended in the following table.


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Existing Industries. Problems and Prospects
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Jyotirmayee Devi (Author), 2008, Existing Industries. Problems and Prospects, Munich, GRIN Verlag, https://www.grin.com/document/354758


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